INTRADAY TECHNICAL ANALYSIS 20 MAY (observation as of 05:20 UTC)

[EURUSD]

Important Levels to Watch for:

-        Resistance line of 1.22454 and 1.22788.

-        Support line of 1.21372 and 1.21038.

Commentary/ Reason:

  1. The euro changed hands at $1.21818, rose 0.10% on the day having slipped 0.4% in the previous session and off a 3-month high of $1.22448.

  2. The Europe climbed as the benchmark German Bund yield steadied on Thursday, having climbed to a 2-year high overnight as investors increasingly priced in the possibility of the ECB slowing its bond-buying.

  3. The dollar meanwhile scaled higher after minutes from the Fed’s last policy meeting revealed there was more talk of tapering its bond purchases than investors had expected.

  4. The EUR/USD break of the 1.217 resistance level was short-lived as Euro sellers immediately returned. Given the sharp trajectory of the uptrend and clear bullish support the pair may now languish at the bound of the 1.213- 1.22 trading range. Momentum indicators remain bullish.

EURUSD

 

[USDCHF]

Important Levels to Watch for:

-        Resistance line of 0.90688 and 0.91005.

-        Support line of 0.89665 and 0.89349.

Commentary/ Reason:

  1. The Swiss franc eased to 0.90396 per dollar from Tuesday’s 0.89602, its highest in nearly 3 months.

  2. The Swiss franc extended yesterday’s losses against the U.S. dollar today after the release of the FOMC meeting minutes, which indicated that the U.S. economy was improving rapidly and could lead to tighter monetary policy.

  3. The market had been anticipating that monetary policy would have to change to restrain inflation and it was the main cause of the greenback's gains against the franc.

USDCHF

 

[GBPUSD]

Important Levels to Watch for:

-        Resistance line of 1.41990 and 1.42383.

-        Support line of 1.40717 and 1.40323.

Commentary/ Reason:

  1. The British pound little changed on Thursday, to trade at $1.41142, steadied after slipping 0.50% on previous session.

  2. A tapering talk from the U.S. Federal Reserve following the released of its minutes meeting Wednesday drove selling in the bond market and lifted the safe-haven U.S. dollar.

  3. British inflation more than doubled in April, the start of a likely climb in prices this year as rich economies recover from pandemic lockdowns, but one that the BoE hopes will prove temporary.

  4. The GBPUSD pair remains stuck to the 1.413 price line, as a break attempt has been countered by sellers taking price action back towards the 1.410 support area. The ascending trendline remains intact as a key support level where bullish rebound generally result.

GBPUSD